UK SRS compliance · what comply or explain requires
UK SRS compliance: comply, or explain properly
UK SRS compliance became a legal question on 30 September 2026, when the FCA published its final rules requiring listed companies in five categories to report against UK SRS on a comply-or-explain basis.
They apply to accounting periods beginning on or after 1 January 2027, and nothing in them makes any disclosure mandatory.
What they do make exact is the explanation: what it must contain, when a relief removes the need for one, and which statements every in-scope company makes whatever it discloses.
The basis
Comply or explain, for everything
PS26/19 ¶1.7 requires a comply-or-explain approach across all categories of disclosure.
That brings UK SRS S2 into line with the basis CP26/5 had proposed only for UK SRS S1 and Scope 3; the consultation’s mandatory S2 did not survive.
It also brings secondary listings and depositary receipts, UKLR 14 and 15, onto the same basis, in place of the signposting statement CP26/5 had proposed.
The rules replace the TCFD-aligned listing-rule disclosures (¶1.10), the regime that grew from the FCA’s earlier policy statements such as PS21/23 and the TCFD recommendations.
Scope is set by listing category; UK SRS thresholds explains why there is no size test and who is in scope takes each category in turn.
“Where issuers do not provide financially material information in accordance with UK SRS, a proportionate explanation of their reasoning and judgement can itself provide useful information to investors.”
Source: PS26/19 ¶1.3
UKLR 6.6.6R(7A) and (7B)
What an explanation must contain
| UK SRS S2 — UKLR 6.6.6R(7A)(b) | UK SRS S1 — UKLR 6.6.6R(7B)(b) | |
|---|---|---|
| Triggered when | The S2 disclosures are not made, or made only in part | Risks or opportunities of the kind in S1 ¶3 have been identified but not disclosed, or only in part |
| First part | A summary of the UK SRS S2 requirements not met | The relevant risks or opportunities not disclosed |
| Second part | The reasons for not making those disclosures | The reasons for not making those disclosures |
| Third part | Any steps being taken or planned to make them in future | Any steps being taken or planned to make them in future |
| Works at the level of | The requirement | The risk or opportunity |
No timeframe in the S2 limb
The made rule asks for steps, not dates.
CP26/5’s draft and much commentary spoke of a timeframe; the final text does not.
Guidance still in draft
What a good explanation looks like is in draft Technical Note 803.1, in Primary Market Bulletin 66, open for comment until 28 October 2026 (¶1.9). It is proposed guidance, not final.
Check a draft
Test your explanation against the rule
An explanation is judged twice: once against the rule, which fixes what it must contain, and once against the FCA’s guidance, which describes what a useful one looks like.
The rule is short: for UK SRS S2, a summary of the requirements not met, the reasons, and any steps taken or planned; for UK SRS S1, the risks or opportunities not disclosed, the reasons, and any steps.
A draft missing any of the three is not an explanation under the rule, however well written.
The guidance is still a draft, and the panel labels it as such: the FCA proposes that explanations be clear, concise and cogent, and specific to the issuer.
It proposes that an explanation can be short and proportionate but should not omit material information.
It says the rules do not require an explanation for each requirement not met, and that pointing to the headings or paragraphs of the standard is enough.
And it does not require a timeframe, while saying one helps where it is known or estimated.
The quickest failure to spot is the report that explains a gap and still claims unreserved compliance with the same standard.
Test your explanation · rule and draft guidance
Rule (7A)(b)(iii): the statement must set out any steps being taken or planned to make them in future.
Draft guidance: make the reasons issuer-specific rather than generic.
Draft guidance: naming the headings or paragraphs not met is enough; no requirement-by-requirement explanation is needed.
No timeframe is fine: the rule does not ask for one, and the draft guidance says it helps only where one is known or estimated.
Rule: UKLR 6.6.6R(7A)(b) and (7B)(b), and the UKLR 14, 16 and 22 equivalents (FCA PS26/19 Appendix 1).
Guidance: the FCA’s draft Technical Note 803.1, proposed, comments to 28 October 2026.
Your ticks stay on this page.
Whatever you disclose
The statements every in-scope company makes
A company using a relief states that it does so and needs give no further explanation during the relief period, because use of the reliefs does not engage the explain rules.
The reliefs are one year’s non-disclosure of Scope 3 and two years’ non-disclosure under UK SRS S1 for matters beyond climate, from initial application (¶3.14).
The same paragraph keeps the location, assurance and transition-plan statements in play during the reliefs.
Assurance is not required, only disclosed; the sustainability assurance guide explains limited and reasonable engagements.
No company must have a transition plan; UK SRS transition plans covers the disclosure.
The compliance statement is where precision matters most: under UK SRS S1 ¶72 it must be explicit and unreserved, and a company using the climate-only relief may not assert compliance with UK SRS S1 at all.
| Statement | Provision |
|---|---|
| Use of a transitional relief | PS26/19 ¶3.20 |
| Where the disclosures can be found | UKLR 6.6.6R(8)(c) |
| Whether assurance was obtained, and if so by whom, over what, at what level, to what standard | UKLR 6.6.6R(8)(d) |
| Whether a climate transition plan is published, and where — or why not (UKLR 6, 16 and 22) | UKLR 6.6.6R(8)(e) |
| Statement of compliance, only if every requirement is met | UK SRS S1 ¶72 |
| Reliefs used, alongside the compliance statement | UK SRS S1 ¶73A · S2 ¶C5 |
Your statement set
Which statements your report needs
Every in-scope company makes the same kinds of statement, but which ones, and under which rule, depends on four facts: its listing category, the period, what it discloses and what reliefs it uses.
The panel resolves those four into the list the made rules ask for, with the rule number against each line.
The category matters because the rules are numbered per category: UKLR 6.6.6R for commercial companies, 14.3.24R for secondary listings and, through 15.3.1R, depositary receipts, 16.3.23R for non-equity and non-voting shares, and 22.2.24R for the transition category.
It also matters for the transition-plan statement, which UKLR 14 and 15 companies do not make.
The period matters because the reliefs are layered: both in the first period, the S1 relief alone in the second, none from the third.
A period beginning before 1 January 2027 offers a choice between the TCFD-aligned rules and early adoption, and early adopters keep the same reliefs (PS26/19 ¶3.19).
On assurance, the FCA says it is not requiring explanations where assurance was not sought: the statement records what was obtained, not why nothing was.
Which statements do I need? · PS26/19
8 items for UKLR 6
- UK SRS S2
UKLR 6.6.6R(7A)(a)
Climate-related financial disclosures prepared in accordance with UK SRS S2, without Scope 3 under the relief.
- Scope 3 relief
UKLR TP 16.4R(2)(a)
State in the annual financial report that you rely on this transitional provision and on UK SRS S2 ¶C4. No further explanation is needed during the relief period.
- S1 relief
UKLR TP 16.4R(2)(b)
State that you rely on this transitional provision and on UK SRS S1 ¶E3 (climate-first). No further explanation is needed, and you may not assert compliance with UK SRS S1 (S1 ¶73A).
- Location
UKLR 6.6.6R(8)(c)
Where in the annual financial report the disclosures and statements can be found. Cross-reference to another report is permitted where UK SRS S1 ¶¶B45–B47 allow it.
- Assurance
UKLR 6.6.6R(8)(d)
That no third-party assurance was obtained. The FCA does not require a reason where assurance was not sought.
- Transition plan
UKLR 6.6.6R(8)(e)
That you have not published a climate-related transition plan, and why not. There is no duty to have one.
- Comparatives
UKLR TP 16.6G(2)
No comparative information is needed for the first period for which disclosures are made under the rule.
- Compliance statement
UK SRS S1 ¶¶72–73A
You may state compliance with UK SRS S2, disclosing the Scope 3 relief alongside the statement.
Built from the made rules in FCA PS26/19 Appendix 1 (UKLR 6.6.6R(7A)–(8) and the UKLR 14, 16 and 22 equivalents, UKLR TP 16), PS26/19 ¶¶3.14–3.24, UK SRS S1 ¶¶72–73A and the FCA’s draft TN 803.1 (comments to 28 October 2026).
It lists what the rules ask for; it is not advice, and nothing you choose leaves this page.
Timing
When compliance starts
| Periods beginning | Position for a calendar-year company | Source |
|---|---|---|
| Before 1 January 2027 | The TCFD-aligned rules, or early adoption of UK SRS with the same reliefs | PS26/19 ¶3.19 |
| 1 January 2027 | Comply or explain; both reliefs available | ¶¶3.12, 3.14 |
| 1 January 2028 | Scope 3 relief gone: Scope 3 comply or explain | ¶3.23 |
| 1 January 2029 | Both reliefs gone: every disclosure comply or explain | ¶3.24 |
The FCA says it will publish supervisory information in the second half of 2027, ahead of the first reporting season, and holds a webinar on the rules on 19 October 2026 (PS26/19).
Every UK regulatory date, not just UK SRS, is on the UK sustainability regulation timeline.
Draft Technical Note 803.1
What the FCA proposes a good explanation looks like
The FCA published draft Technical Note 803.1 with PS26/19, through Primary Market Bulletin 66, and takes comments until 28 October 2026.
It will replace the listing-rule guidance now in TN 801.4, and replace TN 802.3, the note on the TCFD-aligned rules, in full.
The FCA aims to finalise it before the rules come into force, so what follows is proposed guidance and should be re-read against the final text.
On content, it restates the rule: for UK SRS S2 the explanation must include a summary of the disclosure requirements not met, and for UK SRS S1 a statement on the risks and opportunities of the kind in ¶3 that are not disclosed.
On length, it says an explanation can be short and proportionate, but should not omit material information.
On granularity, it says the rules do not require an explanation for each requirement not met, and that an explanation could indicate the headings or paragraphs not disclosed.
On timing, it says a timeframe is not required, but would help if one is known or estimated.
On a company with nothing to report beyond climate, it says a brief statement of that fact is needed.
On compliance statements, its Annex 1 says an issuer that explains cannot also make an explicit and unreserved statement of compliance with that standard, and that there is no separate requirement for a compliance statement under the listing rules.
Explanations the standards themselves allow — UK SRS S1 ¶40 and UK SRS S2 ¶21, where financial effects cannot be quantified — are part of complying, not of explaining, and do not break a compliance statement.
International companies may rely on home-jurisdiction reporting and cross-refer to it, explaining only where UK SRS is not met in full.
For judging what is material, the draft points preparers to the IFRS Foundation’s educational material.
Illustrations
Two explanations, written out
Against UK SRS S2 · UKLR 6.6.6R(7A)(b)
“Our climate-related financial disclosures are prepared in accordance with UK SRS S2 except paragraph 22(b), on the inputs and assumptions of quantitative scenario analysis.
We completed a qualitative scenario analysis this year; the quantitative model of our two largest sites’ flood exposure will not be ready until next year because the site-level asset data it needs is still being assembled.
We have commissioned that data and expect to report the analysis in our next annual report.”
Against UK SRS S1 · UKLR 6.6.6R(7B)(b)
“We have identified water availability at our two manufacturing sites as a sustainability-related risk of the kind described in paragraph 3 of UK SRS S1.
We have not made disclosures on it in accordance with UK SRS S1 because we have not yet measured site-level water use.
We are installing metering during the coming year.”
Both are our own illustrations, not model wording from the FCA, and both use invented facts.
Each carries the three parts: what is missing, why, and what is being done.
The S2 example names the paragraph; the S1 example names the risk, because that is what each limb works on.
Neither gives a date it cannot support; the S2 example gives a timeframe because the company has one.
A company that used the first example could not also state unreserved compliance with UK SRS S2.
A first-year company that instead relied on the Scope 3 relief would not explain at all: it would state that it relies on its category’s transitional provision and UK SRS S2 ¶C4.
Making it easier
How to make UK SRS easier to comply with
The rules themselves contain most of the ways to make compliance lighter, and all of them are legitimate.
Use the reliefs where they fit: one year for Scope 3 and two years beyond climate, each discharged by a statement rather than an explanation.
Adopt early if it helps: a company with a period beginning before 1 January 2027 that adopts UK SRS keeps the same reliefs.
Cross-refer rather than duplicate: disclosures may be included by cross-reference to another report on the terms in UK SRS S1 ¶¶B45–B47.
Reuse what already exists: TCFD-aligned disclosures cover the same four content areas, and SECR energy and emissions data, converted with the government’s conversion factors, is the natural base for Scope 1 and 2.
Apply materiality properly: UK SRS S1 ¶B25 lets a company leave out information that is not material, even where a standard lists it.
For secondary listings and depositary receipts, rely on home-jurisdiction reporting where it meets UK SRS, and explain only the gaps.
And explain honestly where you cannot comply: the FCA’s own reasoning (PS26/19 ¶1.3) is that a proportionate explanation of reasoning and judgement is itself useful to investors.
Supervision
Who checks, and against what
PS26/19 ¶2.82 says the FCA will monitor and enforce compliance with its UK SRS and transition-plan rules together with the FRC.
The FCA says it will update its supervisory approach in the second half of 2027, in time for the first reporting season.
Primary Market Bulletin 66 reminds issuers of Listing Principle 1 at UKLR 2.2.1R and of DTR 4.1.8R, the requirement to describe principal risks and uncertainties in the management report.
The disclosures sit in the annual financial report, which must be public within four months of the year end (DTR 4.1.3R) and carries the responsibility statement under DTR 4.1.12R.
The FCA’s cost model shows why the explanation needs care: it models explaining against all of UK SRS as far cheaper than complying, which is exactly why a thin explanation will draw attention.
The FCA does not expect to carry out a formal post-implementation review of the rules.
| A large domestic issuer | One-off | Each year |
|---|---|---|
| Comply with all of UK SRS | £127,900 | £194,700 |
| Explain against all of UK SRS | £22,200 | £8,900 |
Preparing
Five workstreams, in order
1 · Scope and ownership
Confirm the listing category and the reporting entity; assign board oversight and an executive owner.
2 · Materiality under S1 ¶3
Identify the risks and opportunities that pass the test — they are what you disclose, or name in a (7B) explanation.
3 · Emissions data
Build Scope 1 and 2 on the GHG Protocol from SECR data, and screen the Scope 3 categories.
4 · Scenarios and financial effects
Run scenario analysis commensurate with your circumstances, and agree assumptions with the accounts.
5 · Drafting and statements
Draft to the paragraph, explain by requirement for S2 and by risk for S1, and prepare the location, assurance and transition-plan statements.
The order is our reading of where the lead times are: governance and materiality need no new measurement, while Scope 3 and scenario analysis take longest.
Most in-scope companies already make TCFD-aligned disclosures, so the gap is narrower than it looks; TCFD and UK SRS maps the two.
The measurement basis is the GHG Protocol Corporate Standard; Scope 3 is on UK SRS Scope 3 reporting, and platforms are compared on carbon reporting software.
A voluntary dry run, before the first period, is the cheapest way to find the gaps; the readiness assessment structures it.
Someone has to own the programme: some companies build a team, some bring in independent specialists — see the UK SRS consultancy guide, carbon consultants or sustainability recruitment — and some hire a part-time lead, for example through a fractional recruitment agency or the fractional sustainability jobs market.
If you would rather talk it through, you can book a free 15-minute call, or go back to the UK SRS reference homepage for the status of every rule.
Already in force
SECR and ESOS do not wait
UK SRS compliance sits beside regimes with their own populations and their own dates.
SECR, created by SI 2018/1155, uses a self-contained exemption test that did not move with the 2025 Companies Act uplift; the SECR reporting guide covers it, and one practitioner summary of who is caught is Ecologi’s SECR explainer, which is commentary, not a source.
ESOS runs under SI 2014/1643, with the Phase 4 qualification date on 31 December 2026 per the Environment Agency; see the ESOS guide, ESOS compliance guidance and the ESOS Phase 4 compliance guide.
The FCA’s separate anti-greenwashing rule and product labels apply to investment firms, not company reporting; FCA SDR and anti-greenwashing explains the difference.
Financial-services groups have their own angle, covered on UK SRS for financial services.
| Regime | Test | Instrument |
|---|---|---|
| UK SRS (FCA) | Listing category | PS26/19 |
| SECR | Quoted at any size; unquoted if two or more of £36m / £18m / 250 are exceeded | SI 2008/410 Sch 7 |
| ESOS | At least 250 employees, or over £44m turnover and £38m balance sheet | SI 2014/1643 Sch 1 |
| CFD (Companies Act) | More than 500 employees plus a traded, banking, insurance, AIM or £500m-turnover limb | CA 2006 s.414CA |
Private companies
No UK SRS duty, and none proposed
No government document proposes a UK SRS requirement for private companies.
The Modernising corporate reporting consultation, open until 30 November 2026, says the government will consider how UK SRS should be reflected in the Companies Act 2006.
The Department for Business and Trade published the standards for voluntary use, and its guidance says any entity may use them.
A group that also reports in the EU should read CSRD and UK SRS and double materiality, because the EU test is wider.
References
The documents behind this page
The standards are on the government’s UK SRS publication page, built on the ISSB’s international baseline.
The FCA’s rules are in PS26/19 and its consultation in CP26/5; the regulator’s wider material is at fca.org.uk.
The FRC’s FAQs say voluntary reporters may use the reliefs without time limits; the FRC also sets the assurance standards.
Practical guidance from the profession includes the ICAEW’s sustainability hub.
The standards themselves are on UK SRS S1 and S2 and UK SRS S1; the FCA’s part on the FCA and UK SRS; and every date on the dated UK SRS register.
Sister references cover compliance from other angles: srsreport.co.uk on UK SRS compliance and sustainabilityreportingstandards.co.uk.
Frequently asked
UK SRS compliance, answered
Is UK SRS compliance mandatory?
No UK SRS disclosure is mandatory.
The FCA’s final rules, PS26/19, require companies listed in UKLR 6, 14, 15, 16 and 22 to report against UK SRS or explain, for accounting periods beginning on or after 1 January 2027.
Every other entity may use the standards voluntarily.
What does comply or explain mean for UK SRS?
A listed company in scope either makes the disclosures, or makes a statement instead.
For UK SRS S2 the statement gives a summary of the requirements not met, the reasons, and any steps it is taking or plans to take.
For UK SRS S1 it names the risks or opportunities it has identified but not disclosed, the reasons, and what it is doing about them.
How can I make it easier to comply with UK SRS?
Start from what already exists: TCFD-aligned disclosures map onto the four UK SRS content areas, and SECR energy and emissions data is the starting point for Scope 1 and 2.
Use the reliefs openly, keep the assumptions aligned with the accounts, write explanations to the paragraph, and consider a voluntary dry run before the first period.
Who has to comply with UK SRS?
Companies with securities in UKLR 6 commercial companies, UKLR 14 secondary listings, UKLR 15 depositary receipts, UKLR 16 non-equity and non-voting equity shares and UKLR 22 transition.
The FCA gives no count; its consultation estimated around 600 listed companies would be affected.
Does an explanation have to give a timeframe?
Not in the UK SRS S2 limb as made.
UKLR 6.6.6R(7A)(b) asks for any steps the company is taking or plans to take to make the disclosures in future, and does not ask for a timeframe.
The FCA is consulting until 28 October 2026 on draft Technical Note 803.1, which will say what a good explanation looks like.
Do companies using a relief have to explain?
No. A company using the one-year Scope 3 relief or the two-year relief for UK SRS S1 beyond climate states that it is using it in its annual financial report.
No further explanation is required during the relief period, because use of the reliefs does not engage the explain rules.
Is assurance required for UK SRS compliance?
No. A listed company states whether it obtained third-party assurance over its disclosures and, if it did, the provider, which disclosures and at what level, the standards used and where the report is.
The FCA says it will keep the case for mandatory assurance under review.
What happens if a listed company does neither?
A company that neither makes the disclosures nor gives the statement the rule requires would be in breach of the listing rules, which the FCA supervises.
The FCA says it will publish supervisory information in the second half of 2027, ahead of the first reporting season.
What is Technical Note 803.1?
It is the FCA’s draft guidance on comply or explain under the new UK SRS rules, published with Primary Market Bulletin 66 on 30 September 2026.
Comments close on 28 October 2026 and the FCA aims to finalise it before the rules come into force on 1 January 2027.
It will replace TN 802.3 and the relevant part of TN 801.4.
Do I have to explain every UK SRS requirement I have not met?
No. The FCA’s draft guidance says the rules do not require an explanation for each requirement not met, and that an explanation could indicate the headings or paragraphs not disclosed.
For UK SRS S2 the rule asks for a summary of the requirements not met.
Can a company claim compliance with UK SRS if it explains?
Not with the standard it explains against.
The FCA’s draft guidance says an issuer that explains that it has not met one or more UK SRS S2 requirements, or has not disclosed one or more S1 risks or opportunities, cannot make an explicit and unreserved statement of compliance with that standard.
Can an international company rely on its home-country reporting?
Yes, under the UKLR 14 and 15 limbs.
PS26/19 says international companies may rely on home-jurisdiction reporting to reduce duplication, and must explain where UK SRS requirements are not met in full.
They do not make the transition-plan statement.
Can a company adopt UK SRS early and keep the reliefs?
Yes.
PS26/19 paragraph 3.19 lets a company with a period beginning before 1 January 2027 either keep the TCFD-aligned rules or adopt UK SRS early, and early adopters can use the same transitional reliefs.
CP26/5 had proposed that they would lose them.
How much does UK SRS compliance cost?
The FCA’s cost-benefit analysis models average incremental costs over TCFD-aligned reporting of £127,900 one-off and £194,700 a year for a large issuer that complies in full, and £22,200 and £8,900 for one that explains against all of UK SRS.
SME issuers are modelled at 75% of those figures.
They are modelled averages, not prices.
When do large private companies have to comply with UK SRS?
There is no date and no proposal.
The government’s Modernising corporate reporting consultation says it will consider how UK SRS should be reflected in the Companies Act.
The 500-employee and £500 million figures often quoted belong to the Companies Act climate duty in section 414CA, not to UK SRS.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
- Financial Conduct AuthorityPS26/19: Aligning listed issuers' sustainability disclosures with international standards
The final rules, 30 September 2026; the webinar and supervisory timetable.
- Financial Conduct AuthorityPS26/19 (PDF), ¶¶1.3, 1.7, 1.9, 3.12, 3.14, 3.19, 3.20 and Appendix 1
The made limbs (7A), (7B) and (8)(c)–(e), the reliefs, early adoption and the draft guidance.
- FCA HandbookUK Listing Rules, UKLR 6.6
The annual financial report rules the new limbs join.
- Financial Conduct AuthorityCP26/5 (PDF)
The consultation; its proposals differ from the final rules.
- Department for Business and TradeUK SRS S1 (PDF) — ¶¶3, 72, 73A
The test the S1 explanation is framed around, and the compliance statement.
- Department for Business and TradeUK SRS S2 (PDF) — Appendix C
The reliefs, and the duty to disclose their use.
- Department for Business and TradeUK Sustainability Reporting Standards — guidance
Voluntary use by any entity.
- Financial Reporting CouncilSustainability reporting developments — FAQs
Voluntary reporters may use the reliefs without time limits.
- Financial Conduct AuthorityDraft Technical Note TN 803.1 (September 2026, for consultation)
Proposed guidance on explanations and compliance statements.
- Financial Conduct AuthorityPrimary Market Bulletin 66
The guidance consultation, the nine preparation steps and the Listing Principle reminder.
- FCA HandbookDTR 4.1
The annual financial report, principal risks and responsibility statements.
- IFRS FoundationEducational material on material information (PDF)
The materiality material the draft guidance points to.
- legislation.gov.ukSI 2018/1155 (SECR), as made
The SECR regime that continues beside UK SRS.
- legislation.gov.ukESOS Regulations 2014 (SI 2014/1643)
The ESOS regime that continues beside UK SRS.
- GHG ProtocolCorporate Accounting and Reporting Standard
The measurement basis UK SRS S2 names.
- Department for Business, Innovation, Science and TradeModernising corporate reporting — consultation
Open until 30 November 2026; no UK SRS proposal for private companies.